The state of risk management in business schools

Abstract

Purpose – The spread of entrepreneurial rent seeking (or entrepreneurialism for short) and market-based performance measurement (accreditation, rankings) have transformed many business schools into risk-taking organizations. The establishment of formal risk management activities would represent the fitting counterpart to this development. The purpose of this paper is to examine the state of risk management activities in business schools and evaluates the presence of discrepancies from first-best practices found in the corporate sector. Design/methodology/approach – The data for this study were collected through a structured questionnaire addressed to heads of internationally active business schools in cooperation with a major international accreditation provider. Non-parametric and parametric methods (logistic regression) were used to analyze the formalization of risk management in business schools, in particular the differentiating role of entrepreneurial rent seeking and international accreditation. Findings – Risk management is still in the early stages of formalization compared to the corporate sector. The results indicate that entrepreneurial rent seeking does not encourage the institutional establishment of risk management in business schools, while holding international accreditation has the opposite effect. Practical implications – Risk management has become a focus area of regulators and accreditation agencies. The rising number of business schools struggling financially also serves as evidence that risk taking is frequently not matched by formal risk management policies (further supported by descriptive statistics of the survey published separately). The largely uncontested statement of the R. Lyons, Dean of the Haas School/Berkeley, that 50 per cent of business schools will disappear within the next five to ten years can only be rationalized in the context of risk not being appropriately addressed by business schools. Originality/value – The paper represents the first empirical study analyzing risk management practices in business schools. The study design follows the approach commonly employed in the corporate risk management literature to capture the design of the risk management process covering governance aspects as well as approaches to risk identification, risk assessment, risk mitigation and performance controlling.

The entrepreneurial university: an exploration of “value-creation” in a non-management department

“…In our treatment of this entrepreneurship dimension, and its applicability to the entrepreneurial university, we rely extensively on Hommel et al (2016), which sought to examine the state of risk-management activities in business schools and evaluates the presence of discrepancies from first-best practices found in the corporate sector. Entrepreneurialism is transforming business schools into risk-taking organisations (see Hommel et al , 2016).…”

“…In our treatment of this entrepreneurship dimension, and its applicability to the entrepreneurial university, we rely extensively on Hommel et al (2016), which sought to examine the state of risk-management activities in business schools and evaluates the presence of discrepancies from first-best practices found in the corporate sector. Entrepreneurialism is transforming business schools into risk-taking organisations (see Hommel et al , 2016). Proprietary revenue streams tend to be highly volatile and are for instance affected by fluctuations in the school’s competitiveness due to changes in accreditation status or ranking positioning as well as structural demand shifts (e.g.…”

“…such as the introduction of student visa restrictions). Greater risk dependency warrants an explicit effort to manage these exposures; in financial terms “risk” and “return” are two sides of the same coin (Hommel et al , 2016, p. 607). To what extent business schools have moved forward in formally establishing risk-management strategies remains an area of scholarly pursuit (see Kirby, 2004; Huber, 2011; Tufano, 2011; Pittaway and Edwards, 2012; Doherty et al 2015).…”

“…Weaving the discussion around documentary evidence, based on both an analysis of media reports (see e.g. Knibbs, 2014; Moore, 2014; O’Neill, 2014; Gbadamosi and Madichie, 2014), and a review of the extant literature (Hommel et al , 2016; Foss and Gibson, 2015a, b; Doherty et al , 2015; Jones and Rowley, 2009; Morrish, 2011; Hills et al , 2008; Hoy, 2008; Morris et al , 2002; Stokes, 2000; Low and MacMillan, 1988), this study explores an emergent trend, and through narrative, extends the boundaries of the discourse in the domain of the entrepreneurial university.…”

Produção Acadêmica dos Artigos Publicados em Revistas Científicas Nacionais Disponibilizadas na Base Atena sobre o Tema Gestão de Riscos de 2000 a 2015

“…A gestão de riscos é um dos instrumentos (Carrer et al, 2013) e fatores necessários (Kimura, 2002) e basilares para a continuidade dos negócios de qualquer entidade (Hommel, Li & Pastwa, 2016), sendo assim, é considerado um assunto contemporâneo e proeminente (Peleias et al, 2013), pois tem sido objeto de grande atenção no mercado financeiro e na comunidade acadêmica, em especial pela evolução das técnicas de cálculo e gerenciamento de risco que vem ocorrendo ao longo dos últimos anos (Brito & Assaf Neto, 2008).…”